4/2 Daily Market Note: FOMC Breakout is now backtested.
Investors see first -1% Selloff in a Long Time
Hey Folks -
This note will be concise as my thinking on markets have been communicated in our pre-market note (which I think Members can tell I put substantial effort into). 😊
Specifically, we looked for the following:
If being a Bull, Looking for patience on NQ (Nasdaq-100) until 182XX region.
Sharing the sentiment that Intraday longs will be made more challenging.
What does it mean exactly when I say Intraday Longs will be made more challenging? It means that red candles are larger, they are more enduring, and on the flip side, green candles are smaller/less frequent/last a shorter time.
So what happened after I sent this note?
We knifed through 18300 NQ like butter (see 18400 Black Line) and have been quite subdued in the 18200 region.
Within the 18200 region, however, there were opportunities for experienced scalpers to find 30-50 points of long opportunity directly with MNQ/NQ, Sell 0DTE Puts far out of the money (which is what I did), or take a temporary Call.
If one wanted to try their hand at individual stocks, I always suggest looking for ES (S&P 500 proxy) and NQ (Nasdaq-100 Proxy) to bounce first. When NQ bounces, so will the probability of that individual stock. That is the value of understanding 182XX. It makes one more patient and zones in on what is the region to actually consider entries.
From my journal of statistics on Intraday Scalping (educational note) sent to Members embedded in my notes, I share that in Bearish Environments, all we can expect from an NQ bounce is statistically around 30-50 points (and that’s if the market decides to be nice).
182XX was my focus region for today.
Reminder - scalping is not intended to beat the market, but its primary focus is to carve out another way to extract cash flow from certain circumstances to re-deploy into longer-term ideas or simply have the market pay for your next nice Dinner.
The skill is well worth learning, in my opinion.
There is not always an opportunity to scalp. Only take a position when one is really attractive. Patience is even more key in Intraday work.
Members will see that I am constantly upgrading my own skillsets to become a more enduring player in different types of market environments to help all my followers.
In the background I am working on another educational guide for members to be released later this week.
Stay tuned, and of course, I will continue doing my best for you.
As for what’s the next key level when I expect another reaction/setup, Members will be first to know :)
-Larry
Disclaimer: ES/NQ and their MES/MNQ smaller versions (Direct Entries or Futures Options) are a levered way to trade S&P 500 and the Nasdaq-100. However, with leverage comes significant risk. It is essential to Make Sure to use a Simulator Account when starting out or if using live capital, use the smallest micro contracts.
Note: These are my opinions based on my own research and my model may or may not aligned to the market’s thinking. I have to repeat this in all my notes as there is an element of the unknown in today’s strange macro environment.
Disclaimer: My investment community is not investment, financial, or trading advice, but for educational informational purposes only. I am happy to share my personal opinions which I provide as my personal journal. Trading of any kind of securities involves a lot of risk. No guarantee of any profit whatsoever is made. Investors may lose everything they have. Practice extreme caution. No profit is guaranteed whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this publication are NOT registered as securities broker-dealers or investment advisors either with the U.S. SEC, CFTC or with any other securities/regulatory authority. Make sure to consult with a registered investment advisor, broker-dealer, and/or financial advisor.